Push for renewable energy lauded, but divisions over details remain

SACRAMENTO — Hoping to add "green" jobs to a beleaguered state economy, California lawmakers are poised to take up new rules dramatically increasing the amount of renewable power used in the state over the next 10 years.

But while that broad, if ambitious, target — 33 percent by the end of 2020 — has attracted widespread support from utilities, regulators and lawmakers, deep divisions remain over how best to achieve it and how much it might cost.

And time is running out to forge an agreement on the issue — deemed so high a priority by Gov. Arnold Schwarzenegger that he actually threatened to veto other bills on his desk if a deal on renewable energy can't be reached.

A vote on the final package is expected Friday night — the last day of the legislative session and the deadline for a host of other high-profile issues yet to be resolved, primarily water reform and cuts to the state's prisons budget.

Among the lingering conflicts, after months of debate, is how much of the new renewable energy should be produced within California and whether that restriction could wind up costing billions of dollars for new power plants and transmission lines — while also driving up utility rates.

One estimate, by the California Public Utilities Commission, said all that new infrastructure could cost as much as $115 billion. The PUC also cautions that developing new land for solar and wind arrays could encounter costly environmental lawsuits and other challenges.

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Nevertheless, Sen. Joe Simitian, D-Palo Alto, the lawmaker leading the push, said he remained "optimistic" about the chances for a proposal that would keep California on the nation's vanguard.

The proposal, which could go before the Assembly today, has already cleared the Senate and several rounds of Senate and Assembly committee hearings.

"We're further along than ever before," he said. "That means people are getting serious now about what it's going to take to wrap this up."

Renewable energy, water and prison reform are issues of keen interest to Schwarzenegger, who got tough with the Legislature in hopes of spurring breakthroughs in ongoing negotiations this week, vowing to veto all the bills already submitted to his desk.

That move prompted the Senate and Assembly to withdraw dozens of bills that would be submitted again at the end of the session — except for one, a bill honoring Vietnam veterans, meant as a test of the governor's mettle.

And Schwarzenegger promptly took up the Assembly's dare, vetoing the bill as promised.

Of the three, the debate over how to increase renewable power targets for the state's 75 electricity providers — from megaliths like Pacific Gas & Electric to smaller city-owned operations like Santa Clara's — has been the most quiet.

The 33 percent proposal, written by Simitian, would harden into law the target included in an executive order produced last fall by Schwarzenegger. For Simitian, there was urgency to act now — the next governor, he said, might want to rescind the order.

"This is a clean air bill. This is a climate change bill. This is a bill to protect Californians against the energy market manipulations we experienced back in 2001," Simitian said of his proposal, SB14. "It's not smart to have all of your energy eggs in one basket."

There also are questions about whether the goal could even be attained.

A previous law passed three years ago, also pushed by Simitian, required utilities to make 20 percent of their power renewable — meaning from wind, solar, biomass and geothermal sources — by the end of next year.

But because the state's large utilities have struggled to broaden their energy portfolios, the new bill would extend that deadline by two to three years and include incremental targets on the way to 33 percent. Most remain far from the 20 percent target.

PG&E, the state's second-largest utility, says it remains hopeful for a bill it can support but is reserving its judgment until the final contours of the bill emerge. Last week, though, the next-largest utility, the Los Angeles Department of Water and Power, announced its support.

The sticking point for many on the fence is Simitian's insistence that almost all new, renewable power be produced in California.

Officials with the California Independent System Operator, which manages the state's power grid, said allowing more out-of-state power also would keep costs down. California's grid has become too enmeshed with those of its neighbors, they argue, to have walls put up around it.

"In California, maybe the wind isn't blowing, but maybe in the Northwest it is," said Stephanie McCorkle, a spokeswoman for the ISO. "You can optimize a regional grid more efficiently if you share resources, including renewable power."

The Utility Reform Network, an advocacy group, counters that a strong in-state requirement creates jobs and cleaner air in California. Supporters also note that the bill would cap how much customers' utility rates could rise.

Simitian says he's willing to be flexible, allowing providers to shop at energy markets for some of their power and allowing current contracts for out-of-state power to be grandfathered in. And rates would only rise 3 percent for customers — "minimal," he said.

"That's if you believe the cost of fossil fuels will remain the same and if you believe the cost of renewable technology will stay flat," he said. "We're still paying billions" — after the last energy crisis — "because we didn't have a diverse energy portfolio."